Encoding is a process in which data from a source is converted by an encoder into a signal that is transmitted. When the transmitted signal is received a decoder is used to decode the signal and obtain the original data.
There are three types of encoding (and corresponding decoding) techniques: encoding digital data into analog signals (e.g., modem), encoding digital data into digital signals (e.g., wired Local Area Network—LAN), and encoding analog data into digital signals (e.g., codec).
Historically, communication systems were originally based on analog signalling. Analog signalling is very suitable for transmitting speech (e.g., telephone). However, with the increased use of computers that are based on digital signalling, the need to communicate between remote devices, and the availability of analog communication infrastructure (telephone networks) digital to analog encoding was introduced to facilitate transmission of digital data over analog networks. For that aim, a device was developed to intermediate between digital devices (computers) and analog systems (telephone systems) that was named modulator/demodulater (modem). A modem receives a digital signal and modulates it into an analog signal that may be transmitted over an analog communication network, to a destination where another modem demodulates the analog signal back to its original digital form.
In analog transmission a transmitter uses a carrier signal (typically a high frequency signal) to serve as a carrier of the encoded signal. Analog encoding typically involves amplitude modulation (AM), where the amplitude of the carrier signal is modulated in a specific manner, frequency modulation (FM), where the frequency of the carrier signal is modulated in a specific manner, phase modulation, where the phase of the carrier signal is modulated, and quadrature modulation, which uses two carrier signals and combines amplitude and phase modulation to increase the volume of transmitted data without having to increase bandwidth.